Gensource Potash Corp. · TSXV:GSP
Gensource Potash — Investor Presentation (April 2017)
29 slides from Gensource Potash's investor presentation, April 2017
Slide 1: Gensource Potash Corp. February 2017
www.gensource.ca (TSX.V: GSP) February 2017
Slide 2: Disclaimer
Disclaimer This presentation does not constitute and offer to sell, or the solicitation for the offer to buy, the securities of Gensource. The scientific and technical information contained in this presentation has been reviewed and approved by Mike Ferguson, P.Eng., who is the President and Chief E
Slide 3: Why Potash?
Why Potash? Customers seek additional potash sources to reduce dependency on the small group of suppliers Choice: Provides a choice to consumers, from a new, independent producer Direct-to-consumer (or as close as possible) sales result in significant savings by by-passing the “middle man” distr
Slide 4: Investment Thesis
Investment Thesis Disrupting the highly controlled potash market Technical Innovation Vertical Integration Small & Scalable • Selective dissolution, a • Creating an integrated • Economic small scale 21st century extraction business model with extraction operations and processing key single-market (2
Slide 5: Share Structure
Share Structure As of April 12, 2017 GSP-V Stock Price Market Capitalization $52.7 Million Recent Share Price $0.19 52 Week Range $0.06 - $0.24 Basic Shares 281.9 M Outstanding Options 15.8 M Warrants 63.8 M Cash Position $600 K Debt $0 Management, Directors ~38% & Business Associates www.gensource.
Slide 6: Business Opportunity
Business Opportunity Agriculture growers face continued margin compression and have zero potash supply choice Index of Crop price divided by potash price Source: World Bank data statistics, IMF International Fin. Stats., Gensource Potash www.gensource.ca (TSX.V: GSP) 6
Slide 7: Vertical Integration
Vertical Integration Vertical integration has not been possible in potash due to the extraordinarily high barriers to entry End-user Benefits - improved pricing coupled with improved access to potash fertilizer Direct-ship to end-users Small & scalable potash facility Vertical Integration: (250,000
Slide 8: Small & Scalable
Small & Scalable How do you be small in an industry that lives on BIG numbers? 1. Start with a senior team of industry leading experts in cavern design, potash processing and project management 2. Assemble a massive resource. Gensource has two project areas with 100,000 acres of mineral leases - 145
Slide 9: Management & Board Strength
Management & Board Strength Experienced Leadership - Management Mike Ferguson, P. Eng. - President & CEO Led the world-class team that developed Potash One’s Legacy Project, the only Saskatchewan greenfield potash development in 40 yrs to proceed to construction. Sold to K+S for $434 million Rob The
Slide 10: Management & Board Strength
Management & Board Strength Experienced Leadership - Directors Mike Ferguson, P. Eng. - President & CEO Led the world-class team that developed Potash One’s Legacy Project, the only Saskatchewan greenfield potash development in 40 yrs. to proceed to construction. Sold to K+S for $434 million Dwayne
Slide 11: Technical Team
Technical Team These individuals, together with Mike Ferguson, comprised the core Potash One team responsible for the project’s success Max Ramey, P. Eng. - Solution Mining Solution mining lead for the Potash One - Legacy Project (as well as the Rio Tinto - Potasio Rio Colorado Project in Argentina)
Slide 12: Vanguard Project
Vanguard Project • Vanguard project situated outside South Central Saskatchewan Craik along Provincial Highway 11 between Saskatoon (140 km) and Regina (120 km) • Central to infrastructure including roads, rail, water, and power • Strong local and provincial support KL 244 • Positive Preliminary Eco
Slide 13: Vanguard PEA Results
Vanguard PEA Results Compelling Project NPV and IRR Project capacity: 250,000 t/a final product, Pre Sask. Profit Post Sask. Profit Indicator standard grade Tax Tax Mine life: >100 years, 64 Mt of inferred NPV8 $322,594,953 $212,671,723 resource (NI 43-101Resource IRR 19.55% 16.86% Estimate 04/28/16
Slide 14: Comparative Mining Methods
Comparative Mining Methods Conventional Conventional Solution Selective Dissolution Mining (Vanguard) Min. viable production 2.5+ Mt/a 2.0 Mt/a 250 kt/a rate Capex per tonne ($US) $1,990 * $1,620 * $761 ** Operating costs ($US) $80 /t * $118/t * 40.3/t** Development Time 7-10 years 6-8 years 3 years
Slide 15: Comparative Project Economics
Comparative Project Economics Vanguard’s cash costs are the lowest in North America and on par with Russia Source: BMO Capital Market Sept 2016, Gensource Potash www.gensource.ca (TSX.V: GSP) Gensource PEA 2016 There is no certainty that the reserves development, 15 production, and economic forecast
Slide 16: Vanguard Potash Corp. - 1st JV
Vanguard Potash Corp. - 1st JV April 4, 2017 - executed a shareholders Agreement with Essel Group ME Limited (“EGME”) creating JV Co., Vanguard Potash Corp. “VPC”* Key Joint Venture and Off-take Terms EGME to contribute capital to Vanguard in two tranches: (i) First tranche of $US 5M will be used to
Slide 17: About Essel Group Middle-East Ltd.
Upon completion of Phase One (to produce 250,000 tonnes), VPC shall make all commercially reasonable efforts to complete one or more expansion phase necessary to increase production of potash to a final production target of 1M t/yr; Vanguard Board comprised of three nominees of EGME and two nominees
Slide 18: Vanguard Plant Design
Vanguard Plant Design Advancing the engineering and design for the first module to be constructed in the Vanguard Area - Simple and Repeatable www.gensource.ca (TSX.V: GSP) 18
Slide 19: Selective Dissolution
Selective Dissolution Cost effective and efficient recovery method Step 1 • Horizontal drilling techniques enable the creation of horizontal Selective Dissolution caverns Step 2 • Brackish formation water is used as the input (not fresh surface water) and made into an extraction brine by saturating
Slide 20: Simple Mining Schematic
Simple Mining Schematic Conceptual Horizontal Well Pattern Conceptual Horizontal Cavern for Selective Dissolution www.gensource.ca (TSX.V: GSP) 20
Slide 21: Big Problem with Existing Technology
Big Problem with Existing Technology Gensource is NOT a Conventional Potash Mine Gensource facility - 300 Meters by 300 Meters Conventional = HUGE environmental footprint • Massive salt tailings stored on surface for indefinite period • Large fresh water consumption • Large demand on utilities Genso
Slide 22: Development Timelines
Development Timelines Proposed production horizon less than 3 years 2016 2017 2018 2019 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 PEA / Scoping Study Completed Market Partner JV Vanguard Potash Corp. Announced Exploration Drilling Completed NI 43-101 Resource Update Completed 3D Seismic Completed Feasibil
Slide 23: Drilling & Geology
Drilling & Geology Technical NI 43-101 Resource Report 145 million tons Indicated – 328 million tons Inferred INDICATED RESOURCE Total Sylvinite Sylvite Tonnage Sylvite Tonnage Sylvite Tonnage Sub- Total KCl Carnallite Insolube Average Member Sylvinite Tonnage with (KCl), 30% (KCl), 40% (KCl), 50% M
Slide 24: Drilling & Geology
Drilling & Geology Well #2 Well #1 (Drilled 1-18 (Drilled Resource is early (Drilled late thick, rich and 2017) 2012) 2016) Average Grade consistent Patience Lake (wt% KCl) 36.9 34.2 33.9 Member Thickness (meters) 12.7 11.1 14.4 Average Grade Belle Plaine (wt% KCl) 34.6 33.8 35.7 Member Thickness (m
Slide 25: Project Development
Project Development Work Completed To Date Initial Exploration PEA Land / Mineral PFS Status FS Initial Resource www.gensource.ca (TSX.V: GSP) 25
Slide 26: Project Development
Project Development Current Status & Next Steps Initial Exploration PEA Land / Mineral PFS Status FS Initial Resource www.gensource.ca (TSX.V: GSP) 26
Slide 27: Lazlo Project
Lazlo Project • Second project area, total of 123,000 acres and ideal candidate for a selective dissolution operation • Lazlo Project is located in the “Davidson Sub- Basin” region of the Prairie Evaporite underlying central Saskatchewan, with combined thicknesses of about 30m of high-grade, mineabl
Slide 28: Lazlo Project
Lazlo Project The resource in the Lazlo area is rich and widespread • Updated NI 43-101 report completed in December 2014 • Defines an “exploration target” complete with ranges of expected resource grades and tonnages www.gensource.ca (TSX.V: GSP) 28
Slide 29: Contact
Contact Mike Ferguson, P.Eng. Rob Theoret, B.Comm., CIM President & CEO CFO mike@gensource.ca rob@gensource.ca 306-974-6414 306-974-6406 Gensource Potash Corp. Suite 1100, 201 1st Ave. South Saskatoon, Saskatchewan S7K 1J5 www.gensource.ca (TSX.V: GSP) 29
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